The merger of FCA and PSA: will all brands survive the path of inevitable savings?


In the heap of figures that we partially cited in yesterday’s note on the fact of the official statement on the merger of Fiat Chrysler Automobiles and Groupe PSA, and which analysts operate on when painting the future of the new auto giant, the most interesting are those cited by the American publication The detroit news. General Motors Corporation needs 180 thousand employees to produce 8.4 million cars a year, and the combined FCA-PSA for the production of 8.7 million cars employs 400 thousand people. Obviously, something needs to be done with this imbalance, otherwise one can not dream of economic efficiency, for the sake of which, in fact, the merger was planned. Representatives of both merging companies stated that they did not plan a mass closure of the plants, but some kind of optimization would certainly be, and in the future, perhaps quite tough.

Recall that in 2017, Groupe PSA absorbed the German brand Opel, and before the end did not digest it, but already managed to make it profitable. This was achieved, among other things, by reducing staff, which I had to go against the groans of German trade unions. Until the end of the formal completion of the transaction between FCA and PSA, that is, in the coming year, there will certainly not be mass layoffs and other sharp steps, but then the inevitable and sometimes very painful integration process will begin.

The French subcompact CMP platform will be a real salvation for the Fiat brand, whose model line in Europe is hopelessly outdated.




At the moment, according to the source Automotive News, only one fundamental decision was made: 2/3 of the total volume of cars produced will be based on only two platforms, and both of these platforms are French: subcompact CMP and compact EMP2. This means that virtually the entire European wing of the FCA will move to these two modular “bogies”, and that in the coming years you can not expect crossovers with mechanical all-wheel drive, which is so in demand in Russia, from the brands Peugeot, Citroen, Opel and Fiat.

CMP and EMP2 platforms are simply not designed for four-wheel drive with a universal joint under the floor, but in Europe, in fact, nobody needs it, but the ability to build cars on these platforms with any type of power plant (diesel, gasoline, hybrid, electric) very useful in light of the upcoming tightening of standards in Europe, CO emissions2 – Without massive and affordable zero-emission models, automakers will have to pay gigantic fines to the EU box office. So, Reuters quoted by PA Consulting, according to which, if the FCA retains its current lineup in Europe, it will be forced to pay fines of 430 million euros annually.

Meanwhile, FCA has its own subcompact electromobile platform, which will form the basis of the new Fiat 500 (the premiere is expected next spring at the Geneva Motor Show). Her fate in the light of the merger with the Groupe PSA is still unclear – it is quite possible that it will turn out to be “disposable”, that is, we will not see other cars on it.

Alfa Romeo brand can partially use French CMP and EMP2 trolleys for its younger models, but they are no longer suitable for Maserati luxury models – the previous development plan will most likely remain in force.

The future of the Abarth brand is a big question, but there is hope that Carlos Tavares will convince the board of directors of the combined company to keep it.

Most of the questions are raised by the future of the European brands Abarth and Lancia. The latter is popular only in Italy and is hardly worth the investment, but it can still survive as a niche electric vehicle brand. The name Abarth does not fit well with the “green” theme, but Tavares himself can save this brand – during his time at Renault, he was the one who pedaled the Alpine revival theme, and therefore, might want to keep Abarth in the FCA-PSA portfolio as a “favorite toy”. If the brand is not closed, then in any case it will remain a niche making cars for a few lovers regarding affordable purebred sports cars – they will not have a significant impact on the overall environmental performance of the united company, and you can “screw” the electric drive on them if you wish.

As for the soplatform Peugeot, Citroen, Opel, Vauxhall, DS, Fiat and, possibly, Lancia, the reasonable question arises: will they become too similar to each other? In the technical sense, of course, they will, but the French and Italians have never had a problem with design – as they say, they can draw in such a way that their mother will not recognize them. In any case, the model ranges of Peugeot, Citroen and DS today have fundamentally different aesthetics, and FCA has proved that Fiat can make completely unique models of the USA for design under the Dodge and Chrysler brands, but they, unfortunately, were not in demand …

It’s time to travel to America. Off-road brand Jeep and pickup Ram are now at the peak of their success, and in the future they will retain their unique platforms that require mechanical all-wheel drive. The Ram line can be expanded with a mid-size pickup truck (this segment is considered promising in the USA), the basis for which will be the new Peugeot truck, developed jointly with the Chinese company Changan.

The upcoming Peugeot pickup may turn into the new Ram Dakota – the third generation of this mid-sized American pickup was discontinued in 2011.

The Dodge brand is likely to be partially related to Alfa Romeo and Maserati – the new generation Charger and Challenger can move to the Italian premium “trolley” with a longitudinal power unit and inherit from them the long-awaited filigree handling.

The main candidate for the shooting is the Chrysler brand, in the portfolio of which there are only two models left – a large 300 sedan and a Pacifica minivan. Once Chrysler made luxury cars that competed with the Cadillac, but now nothing has remained of its former greatness. In the US, Chrysler sales are plummeting (-23% in the third quarter of this year), brand positioning is vague.

But Chrysler may come in handy for an FCA-PSA attack on China. Now the positions of both companies in the Celestial Empire are frankly weak, and Chrysler, with proper investments, could become a competitor to Buick in China – the GM brand feels very confident here and sells about five times more cars than in the USA (in 2018 – 1,068,199 and 206,863 units, respectively). However, the trend in the Chinese market is now negative and, possibly, the FCA-PSA management will decide to focus on other foreign markets – in South America and Africa, where the positions of the mass brands FCA-PSA are quite strong.

Chrysler 300 tried to sell in Europe as the Lancia Thema, but in six years (from 2011 to 2016) managed to sell only a little more than five thousand copies.

Well, what about Russia? What will we get from the merger of FCA and PSA? Most likely, in the coming years, nothing will change significantly, but in the future we can expect much more active promotion of American and Italian brands in Russia. Fiat Chrysler Automobiles scored our country by and large, while the Groupe PSA demonstrates an enviable tenacity in the desire to stay here and work. Of course, the choice of a new development strategy will take years, for which anything can happen in the country and in the world …


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